Chairman Bob's Roundy's To Borrow $150 Million From Either Idiots or The Government To Pay A Dividend To Private-Equity Owners Before The Whole Company Goes Belly-Up

Roundy's Supermarkets Inc. plans to borrow $150 million to pay a dividend to its owners, according to announcements Friday from two ratings agencies. The new debt issue comes three years after Roundy's Supermarkets Inc.'s owners had hoped to sell the company.

The Chicago owners of the Milwaukee-based grocery chain, Willis Stein & Partners, originally set a 2007 target for cashing out their investment, based on the equity firm's strategy of holding properties for five years. But the firm didn't find a buyer, and then the recession hit.

Moody's Investors Services assigned a Caa-1 rating to the new debt and changed the company's ratings outlook to negative from stable. But Standard & Poor's revised its rating for Roundy's to stable from negative. S&P assigned a CCC+ rating to the proposed $150 million debt, which will be a second-lien term loan.

A typical second-lien term loan is secured by a lien on substantially all of the borrower's assets. C-level ratings with both agencies indicate substantial risk. Roundy's plans to close on the loan in April.

What do you bet that some Wisconsin Government Agency buys those bonds as a quid pro quo for Chairman Bob endorsing the Doyle-Barrett-Obama $800 million Madison-to-Milwaukee Choo-Choo?